Don't Manage Your Business for "Tax Purposes"

If I only had a dollar for every time I heard a business owner tell me that the reason they are not more profitable is because they manage their business for tax reasons. That's a big mistake because this limited mindset will hold you back from true prosperity.

As a growing contractor, here's a harsh truth:

Managing your business to only save on taxes might be killing your chances of getting the capital you need to grow.

I get it — I don’t want to pay a penny more than I have to either. But here’s what most tax-savvy contractors don’t realize:

You’re not just filing taxes for the IRS.
You’re also sending a message to lenders, bonding agents, underwriters, and even mortgage brokers.

If You’re Growing, You’ll Need Capital

That might look like:

• Buying a new truck or excavator

• Opening a line of credit for materials

• Bidding on bonded jobs

• Getting approved for a mortgage or new office space

But if your financials show razor-thin profits or inconsistent income, don’t expect bankers or bonding agents to see the full picture. You can’t wink at the loan officer and say, “I make more than this, trust me.”

The Smart Move? Build Your Financial Credibility

Here’s what I recommend to my contractor clients:

✅ Put yourself on payroll. Take a monthly salary that reflects what you'd pay someone else with your experience and skills.

✅ Take dividends if profits allow. Monthly or quarterly is fine—but only after you've paid your obligations and set aside funds for growth.

✅ Have your company pay your taxes. Need I say more?

✅ Don’t buy things just to reduce taxes. That $80K truck might give you bonus depreciation—but if it weakens your balance sheet or starves your cash flow, it’s a short-term win with long-term consequences.

Legal, Tax, and Business Reasons Don’t Always Align

Here’s what I tell clients:

Every decision has 3 lenses:

1. Legal – Is it compliant?

2. Tax – Does it reduce my liability?

3. Business – Does it support long-term growth?

Sometimes you should make a move for tax reasons. But not if it wrecks your chance to get bonded, access capital, or build a fortress balance sheet that helps you ride out economic storms (tariffs, supply chain delays, politics—you name it).

One Final Truth: Pay Yourself First

Over 51% of small business owners forgo a paycheck for multiple months to keep the business afloat. But if you’re always last to get paid, eventually burnout (or bankruptcy) wins.

Let’s fix that.

👉 Take the Contractors Financial Blueprint Assessment
It’s free, takes just 90 seconds, and will show you exactly where your financial blind spots are—so you can stop letting tax season drive your business decisions.

Take the Assessment Now »
Then book a free 15-min call with me to walk through your results.

To Your Success,

Patrick Shurney, MBA
Founder, 3P Consulting
📞 443.539.6276
🌐 www.3pcllc.com

Helping Contractors Get Their Finances Sorted

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About Me:

As a veteran in financial coaching with over 30 years of corporate banking experience, my mission is to empower Trade Contractors like you to become numbers confident, optimize cash flow, leverage debt, and pay yourself competitively.

Ready for More?

Here’s how I can help you:

1.     Profit Blueprint Program: Master your business numbers in just 30 days, uncovering hidden profits of $25K-$75K+ over the next 3-12 months.

2.     Loan Consulting: Need the best rates and terms on your next loan? With 30+ years of banking experience, I’ll make sure you get a deal that works for you.

Ready to take your financial strategy to the next level? Let’s connect and make sure you’re running a thriving business while paying yourself what you’re worth.